Cannabis has seen a boom. Over the last decade, we’ve observed that cannabis businesses have grown from a dark underbelly to a sustainable business model, from Pineapple Express to Billions, as cannabis sales are expected to skyrocket from $10.6 billion in 2018 to $97.3 billion by the end of 2026. The companies that help people get their hands on it, from seed to sale, understand that a higher degree of expertise is required to get a piece of the pie.
We’ll explore how cannabis businesses have changed over the last century, how technology helps them fulfill today’s expectations, and what technologies you’ll need to succeed in today’s cannabis industry in this guide.
The Evolution Of The Cannabis Business
The cannabis industry was served by a patchwork of farmers and agriculturists, distributors, and recreational and medicinal sellers. It served since the Marihuana Tax Act in 1937, through the Drug War in the 1970s and 1980s, and the earliest attempts at legislation and new regulation. Attorney General Eric Holder suspended raids on dispensaries in 2009, enabling legal cannabis companies to take the next stage in their growth now that they knew they could operate openly.
When recreational cannabis was legalized for the first time in Colorado in 2012, cannabis entrepreneurs took the next step. As more states legalized recreational marijuana usage, cannabis companies could serve a broader market. Cannabis businesses have grown in parallel with legislative developments to service a multibillion-dollar sector that is fast growing.
What are some Problems Cannabis Owners Are Currently Facing?
Considering today’s exponential rise in the cannabis industry, it is not all black and white. Within the industry, there are blue, grey, and various other categories. Below is a list of some frequent challenges that cannabis businesses experience.
Regulatory Adherence
It’s worth noting that the legal cannabis industry is still in its early stages. Cannabis policies differ from state to state in the United States alone. As a result, the compliance standards are constantly changing. One fact is that recreational cannabis is illegal under federal law.
Banking And Financing
Banking is a major bother for cannabis entrepreneurs. Several banks are unwilling to fund or create a company account since cannabis is still illegal under federal law.
Marketing And Advertising
Another issue that cannabis companies must address is how they sell and advertise themselves.
Stigmatization Of Cannabis
Despite being lawful in all 50 states, cannabis and its devoted products continue to be stigmatized. The “stoner culture” is causally linked to these products. Business owners must demonstrate that they are positively contributing to and benefiting the community.
Choosing The Best Tech Partner
As you grow, start thinking about tech partners who can help you stay competitive with cannabis industry accounting while also providing a holistic perspective of your business. You should keep track of all your transactions in one place, whether you’re in the manufacturing, cultivating, distribution, or dispensary business.
Working with an experienced partner with the cannabis sector and the various systems involved may benefit this process. A professional partner can assist you in assessing and prioritizing your requirements, evaluating technological solutions, and providing implementation services to guarantee that your software is installed correctly and most straightforwardly.
How To Solve Problems Using Technology?
Today’s cannabis industry is much like any other. It is constantly producing varieties and formats of a strictly regulated physical product. It is then testing it for health and safety rules and transporting it across a country with glaring gaps where the product is legitimately allowed to exist—that is to say, it is nothing like any other.
To negotiate these complications, cannabis companies must ensure that many of these issues are resolved quickly and, when feasible, automatically. It’s where technology emerges in the context of a cannabis business by aiding cannabis businesses in establishing infrastructure that allows them to manage the industry’s challenges easily.
Cannabis Technology: A Critical Requirement
Emerging markets have turned up seemingly out of nowhere, new supply chains have been required, and new regulatory changes have had to be managed. Other businesses have established a patchwork of diverse solutions to manage the complexity of the seed to the sale process, comparable to the cannabis sector in the past; worse yet, some still rely on old or clumsy technology like spreadsheets to conduct very complicated tasks processes.
From ERP security best practices to inventory control to logistics to point-of-sale to ecommerce, technology impacts every aspect of today’s modern cannabis industry.
While many cannabis businesses are fulfilling technical needs to the extent required to manage compliance and satisfy legal obligations, others are falling short. High-end brand and mid-market technology solutions like enterprise resource planning (ERP), customer relationship management (CRM), and business intelligence and analytics (BI/BA) have a void across the industry.
Enterprise Resource Planning (ERP)
While the cannabis market is distinctive, it is also vast and chaotic. As a result, cannabis businesses must ensure that their business management system meets industry requirements and their own needs.
HR, accounting, marketing, sales, procurement, inventory management, supply, and cultivation tracking are typical areas for cannabis businesses that require a readily incorporated system such as cultivation software, tracking software, etc.
How Does A Cannabis ERP System Work?
Cannabis ERP software is a solution that combines essential back-office functions with the primary seed-to-sale functionality you use every day.
The active part of your business, such as accounting, order processing, supply, and transportation, refers to the back office.
From organizing sales to figuring financials to tracking inventory, Cannabis ERP provides an end-to-end platform for efficiently running a whole cannabis enterprise. These solutions are composed of various modules that fulfill distinct business needs, from planting to end sale. You can opt to deploy ERP on-premises or online, depending on business demands and budget.
Essential Functionalities Or Components Of An ERP System
Users may create customized dashboards with the data to make strategic decisions. Cannabis businesses benefit from a robust cannabis ERP system in the following ways:
- Understand the actual costs of manufacturing.
- Microsoft Power BI for visualizing data.
- Show compliance and make audits easier.
- Keep a high-quality control system.
- Keep track of your lab’s results and procedures.
- Plan long in advance.
- Determine the chain of custody.
- Integrate with state tracking systems to track and trace.
Cannabis ERP is also crucial to the growth of day-to-day operations. Warehouse managers, producers, and drivers are team members whose work directly influences revenues. Using an ERP provides a unified platform for gathering and recording information, producing data records, and making operational changes for these critical workers. Owners have access to and insight into this real-time data, allowing them to make beneficial adjustments to the business if necessary.
Benefits Of Using An ERP System
While investing in a full-stack ERP system before you’ve developed your business may sound frightening, there are several ways this new technology in the cannabis industry might benefit a small business. Some of the most important advantages of adopting an ERP system to manage your new business are as follows:
- Based on demand predictions, manufacturing capacity, and supplier restrictions, optimize production.
- Take use of “track and trace” capabilities for lot control and serial number tracking, raw material inspection, in-process and final inspections, and the preparation of necessary Certificate of Conformance (CoC) reports.
- Offers lower compliance costs while fulfilling industry expectations and regulatory agency standards (such as FDA and Health Canada).
- Increase profits by lowering variability, minimizing waste, sticking to timelines and commitments, and shortening cycle times.
- Take advantage of a worry-free infrastructure that allows you to access data and documents from any device at any time.
- Provide complete insight and control across several divisions and locations from a single place.
Customer Relationship Management (CRM)
Rather than the typical druggies of the past, today’s cannabis customers are an intelligent community. You can track what you need to know about your consumers with CRM software, including where they reside, what they buy, if they’re a medical or recreational user, demographic data, etc.
Businesses may collect customer data before purchasing through content, ads, or newsletters and then utilize that data to stay top of mind with potential leads. According to Salesforce research, businesses that use CRM software see a 34 percent increase in productivity due to automated processes and customer touchpoints. It provides employees with a unified view for customer data-driven insights, allowing sales teams and customer support departments.
Business Intelligence/Analytics (BI)
Business intelligence (BI) software allows companies to collect data from all aspects of their operations to find trends and extract insights. Cannabis businesses may use BI tools to gather data from all aspects of their operations, including purchasing, growing and yielding, shipping and logistics, sales, customer insights, and much more. It can also simplify the reporting process by automatically measuring crucial compliance data.
BI software may also help identify operational flaws and supply chain inefficiencies. Suppose a growth operation is consistently falling short of yield estimates. Suppose logistical challenges generate recurring delays, or online stores are missing sales objectives. In that case, BI software can help you see where the problems occur and provide you with the data you need to fix them.
Ecommerce And Point Of Sale
Due to the COVID-19 outbreak, most cannabis businesses relied primarily on foot visitors to their physical locations to increase sales. The pandemic has forced many cannabis businesses to move to online sales and has encouraged them to do so in a compliant and legal manner. By providing an ecommerce platform, your cannabis business is no longer geographically bound to its consumer base. You may reach a wider audience and increase revenue by allowing customers to purchase online.
You can provide a customized and seamless shopping experience to your customers by connecting with your CRM. Customers can receive visibility into real-time inventory updates and help ensure they can buy what they want without any delivery delays or annoying ‘out of stock’ emails with an integrated ecommerce and PoS platform.
How To Select The Right Cannabis Technology Partner?
It’s time to think about a better choice if you’re a small business trying to meet consumer expectations or spending more time on administration than strategic growth. ERP software for cannabis may help you easier access and manage data, maintain a relationship, boost productivity, improve communications, and, finally, make data-driven choices that propel your small business ahead.
At Evince Development, we understand that the right technology can benefit the efficient growth of the business while also making things easier for you and your staff. Our business process and technology experts can assist you in analyzing your business needs and determining which technology would best serve your company, its employees, and its objectives.